Inheritance Tax Receipts Are £600m Higher Than 23/24, Reveals HMRC

Estate planning experts at Irwin Mitchell say that HM Revenue and Customs’ (HMRC) announcement that Inheritance Tax (IHT) receipts are £600m higher in 2024/25 than at the same time in 2023/24 isn’t surprising and the result of the prolonged freeze of the thresholds, combined with rising property and asset values.

According to the latest HMRC Tax Receipts and National Insurance Contributions Bulletin, IHT receipts for the financial year so far stand at £5.7 billion - £600m higher than the same period in 23/24.

In the 2023/24 tax year, IHT receipts reached £7.6 billion, up from £7.1 billion in 2022/23.

Expert Opinion

“Although there was a dip in the amount of money the government received from IHT in November, the ongoing trend is clear. The prolonged freeze of the thresholds, coupled with rising property and asset values, has steadily increased IHT liabilities and it now receipts look likely to exceed £8 billion in this financial year.

“Further increases are certainly likely to be the direction of traffic in the future, particularly following the recent Budget as even more estates will potentially be impacted.”
Naomi Neville, partner and estate planning expert from Irwin Mitchell 

The recent Budget announcements have extended the freeze on the IHT nil-rate band at £325,000 until April 2030. Additionally, significant reforms to Business Property Relief (BPR) and Agricultural Property Relief (APR) will take effect from April 2026, limiting the 100% relief to the first £1 million of combined agricultural and business property, with the rate dropping to 50% thereafter. The rate of BPR for shares in unlisted companies will also be reduced to 50%. Furthermore, the removal of the pension exemption from IHT will elevate the taxable value of estates, contributing to the continued increase in IHT receipts.

Expert Opinion

“To mitigate the amount of IHT paid, individuals should review and update their estate plans regularly. Utilising available reliefs and exemptions, considering the use of trusts, and planning for business and agricultural property changes are crucial steps. Seeking professional advice can help navigate these changes and minimise IHT liabilities effectively.” Naomi Neville, partner and estate planning expert from Irwin Mitchell